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  1. #1
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    Jul 2013
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    Default Told to Pay Late Fee After Service of 3-Day Pay or Quit

    My question involves an eviction in the state of: California

    My rent is due on the 3rd of each month, and the owner collects the checks from the manager on the 4th, but due to the holiday this week collected them on the 5th which was Friday.

    I informed him (the owner) that I would be able to pay next week, but was not able to pay by the 5th this month due to a car accident I recently had where repairs ended up costing quite a bit more than expected.

    I have only ever been late once before, and have a deposit three times the amount of the rent for my unit down on the apartment, so I didn't think being one week late would be that big of an issue considering I don't owe any back due amount.

    However, on Saturday (the 6th) I was served a 3-Day Pay or Quit by the manager. The notice did *not* include a late fee, and said payment was to be made via money order and given to the manager on premises.

    The three day period will end on Tuesday the 9th (tomorrow) and I intend to pay by then, however, I received a separate email from the owner stating that I should make the payment tomorrow via deposit to his bank account, and that it should include the late fee.

    When I questioned him about these instructions, as they differ from the legal document I was served (and I know late fees are illegal), he responded as follows:

    "By law, the late fee is not to be included in the amount on the 3-Day Notice to Pay Rent or Quit.
    But because your rent was not paid by the 3rd of the month, it is considered late & subject to a late fee of $75.-
    Depositing the rent & late fee at XXXX Bank will move things quicker."

    I know this is not legal, but I don't know how to proceed without upsetting the owner, as I just want to pay the amount of rent due only (per the pay or quit notice).

    Any advise would be helpful.

  2. #2
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    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    If your lease provides for a late fee, you owe the late fee.

    Does your lease provide for a late fee? If so, why don't you want to pay the late fee?

  3. #3
    Join Date
    Jul 2013
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    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    Because I know late fees are illegal in California (regardless of whether they're included on a lease form or not).
    He knows this as well, which is why he did not include it on the pay or quit form, because it's illegal and makes the amount due excessive to boot.
    However, I would like to stay on good terms with them, should I just toss principle aside and pay it even though I know I'm not obligated to do so just to keep him happy?

  4. #4
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    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    Quote Quoting skinca
    View Post
    Because I know late fees are illegal in California (regardless of whether they're included on a lease form or not).
    That is not accurate.
    Quote Quoting Late fees and dishonored check fees
    A rental agreement cannot include a pre-determined late fee. The exception to this rule is when it would be difficult to figure out the actual cost to the landlord caused by the late rent payment. Even then, the pre-determined late fee should not be more than a reasonable estimate of costs that the landlord will face as a result of the late payment. A late fee that is so high that it amounts to a penalty is not legally valid.

    Additionally, in some communities, late fees are limited by local rent control ordinances. (See Rent Control.)

    What if you've signed a lease or rental agreement that contains a late-fee provision, and you're going to be late for the first time paying your rent? If you have a good reason for being late (for example, your paycheck was late), explain this to your landlord. Some landlords will waive (forgive) the late fee if there is a good reason for the rent being late, and if the tenant has been responsible in other ways. If the landlord isn't willing to forgive or lower the late fee, ask the landlord to justify it (for example, in terms of administrative costs for processing the payment late). However, if the late fee is reasonable, it probably is valid; you will have to pay it if your rent payment is late, and if the landlord insists.

    The landlord also can charge the tenant a fee if the tenant's check for the rent (or any other payment) is dishonored by the tenant's bank. (A dishonored check is often called a "bounced" or "NSF" or "returned" check.) In order for the landlord to charge the tenant a returned check fee, the lease or rental agreement must authorize the fee, and the amount of the fee must be reasonable.

    For example, a reasonable returned check fee would be the amount that the bank charges the landlord, plus the landlord's reasonable costs because the check was returned. Under California's "bad check" statute, the landlord can charge a service charge instead of the dishonored check fee described in this paragraph. The service charge can be up to $25 for the first check that is returned for insufficient funds, and up to $35 for each additional check.
    You may believe that the late fee provision in your lease is improper, but you've shared no information about the provision with us.

  5. #5
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    Jul 2013
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    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    From CalTenantLaw.com

    Looking at the application of this language, what is "impracticable or extremely difficult" to show as a loss by the landlord for your paying late? Civil Code 3302 takes all the mystery out of it:

    §3302. Money Payable With Interest
    The detriment caused by the breach of an obligation to pay money only, is deemed to be the amount due by the terms of the obligation, with interest thereon.

    That interest is the "legal rate" of 10% per year, without compounding, or 1/3650 th of the monthly rent per day. On a $1000 monthly rent, that's 27 cents per day, or $1.92 per week. The word "deemed" in this statute is significant. It means that even if the landlord claimed personal injury by furrowing his brow and gnashing his teeth over your late payment, pain and suffering over his deep grief that he would have to cover the mortgage out of his savings, paper and processing costs from having to write you a 3-day notice to pay or quit, the LAW says he's only suffered and is only due the unpaid amount and the few paltry cents of interest. A $50 late fee for being 5 days late is NOT 10% interest, but 370% interest. Because the landlord's loss is "deemed" to be the unpaid rent plus the daily interest, it is neither impracticable nor extremely difficult to assess his actual losses. The defines his losses for him. Therefore, in light of Section 3302, it can never be impracticable nor extremely difficult to assess the landlord's losses, and his late fee will always be illegal, and void.

    Even with Section 3302, which resolves the conflict by itself, what kind of losses would a landlord suffer from your late payment, anyway? Since the mortgage payment is typically not due until the 15th of the month, if you paid by the 15th, he could pay his mortgage without having to dip into his personal savings at the rate of 27 cents per day [in the above example], and he would suffer absolutely no losses. Since the current savings interest rate is and has been for 20 years far below 10% rate, the landlord's actual loss starting the 15th would be his actual interest loss on the $1,000, of about 3 cents per day. The bank could tell him how much that is, if he can't use a calculator, so that amount is not difficult to assess.
    A $75 late payment on $950 rent that is only 6 days overdue, and involves no bounced checks or bank fees can more than obviously be seen as a penalty.

    It is not difficult to figure out the actual cost to the landlord caused by the late rent payment.

    - - - Updated - - -

    Further, since he served me an official Pay or Quit, which states that I need only pay the $950 to remedy the violation, why am I being given separate instructions other than the legal paper with which I was already served?

    I would have gladly paid the rent and late fee, but seeing as he took the steps to serve the Pay or Quit, I feel that I should be bound by those terms, no?

  6. #6
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    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    Your landlord has already told you why the pay or quit notice did not include the late fee.

    You are free to argue to your landlord that the late fee is unreasonable under California law.

  7. #7
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    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    Fine, I don't want to argue this with you.

    I just wanted to know which of the two instructions I am legally obligated to follow, the official "Pay or Quit" or landlord's email.

    Basically you're saying even if I follow the Pay or Quit letter to the tee, I still might not be "up to date" because it doesn't include the late fee?

  8. #8
    Join Date
    Jan 2008
    Location
    Toledo, OH
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    16,307

    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    Basically you're saying even if I follow the Pay or Quit letter to the tee, I still might not be "up to date" because it doesn't include the late fee?
    That is correct. Regardless of the pay or quit notice, the terms of the lease govern.

    You can either pay the late fee, or face eviction.

  9. #9
    Join Date
    Jul 2013
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    5

    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    Thank you, that's what I needed to know.

  10. #10
    Join Date
    Sep 2012
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    1,991

    Default Re: Told to Pay Late Fee After Service of 3-Day Pay or Quit

    if you want to use information from a site that is

    a) clearly pushing a particular agenda

    b) looks like 1997 barfed all over the screen

    c) wants to sell you phone calls to the operator of the site for $5/minute

    go right ahead, but i would look a little harder for actual sources such as the california state government i am sure they have a tenants rights publication.

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